NEW YORK CITY-On several year-over-year measures—quarterly and 12-month funds from operations, quarterly net income, quarterly and yearly revenues and quarterly and 12-month same-store NOI—SL Green Realty Corp. Wednesday evening reported gains compared to the end of 2011. The results were “exceptional,” especially given the overhang of Hurricane Sandy, uncertainty over the election outcome and the fiscal cliff deadline that hung over the fourth quarter, CEO Marc Holliday said during a conference call Thursday afternoon.
Despite that uncertainty, the REIT managed to raise same-store occupancy at its Manhattan office properties by 50 basis points during Q4, Holliday said. The quarter was followed by a positive start to 2013, Holliday said Thursday: although January is normally a quiet month, this year it saw about 150,000 square feet of leasing across the SL Green portfolio. The REIT signed 321,622 square feet of leases in itsManhattan portfolio during Q4, and another 109,410 square feet in its suburban properties.
Compared to the second half of 2012, tenants in that portfolio appear to have a higher confidence level in the economic outlook, said Holliday. That will lead to more business expansion as the year goes on, he predicted.
Even so, “It’s still a market where tenants are looking for value” as opposed to luxe locations, said Steven Durels, EVP and director leasing and real property for the REIT, said during Thursday’s call. That naturally affects their rent expectations; however, Durels said he expects rent growth in the second half of the year will be “a little more bullish.”
Q4 FFO for the office REIT was $1.16 per share compared to prior year FFO of $1.04 per share, while full-year FFO of $5.35 per share represented an increase of nearly 10% on the $4.88 per share for the 12 months that ended Dec. 31, ‘11. Net income totaled $20 million in Q4, compared to $2.8 million for the same quarter the year prior. Full year net income attributable to common stockholders totaled $156.0 million, or $1.74 per diluted share, for the year, compared to $617.2 million, or $7.33 per diluted share, for ‘11.
For Q4, SL Green’s revenues and operating income reached $350.7 million and $180.2 million, respectively, compared to $328.9 million and $167.5 million, respectively, for the same period the year prior. For the full year, the company reported revenues and operating income of $1.4 billion and $834.0 million, respectively, compared to ’11 results of $1.3 billion and $702.4 million, respectively.
The fourth quarter was also highlighted by “a lot of transactional activity,” Holliday said. Among the highlights were the REIT’s sale of a 49.5% interest in 521 Fifth Ave. at a gross sales price of $315 million, and the $122.3-million acquisition of a 68,342-square-foot retail property at 131-137 Spring St., with Burberry and Diesel as anchors.